Tea party groups threaten to sue IRS

Tea party groups on Monday are threatening to sue the Internal Revenue Service after the agency admitted last week that it wrongly targeted conservative groups applying for nonprofit status.

“We are looking at it pretty seriously,” said Dan Backer, a lawyer who represents a half dozen conservative groups targeted by the IRS, including Combat Veterans Training Group and TheTeaParty.net. “Given the sheer scope of maleficence at the IRS, there may be a legal recourse.”

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Backer said the IRS asked some of his clients for donor lists and extensive information from their Facebook pages.

The agency has maintained that although its actions were inappropriate, laws weren’t broken.

The IRS said on Friday that it inappropriately subjected groups applying for nonprofit status to extra scrutiny if their applications included terms such as “tea party” or “patriot.”

It became clear Monday that the practice was broader. Groups hoping to make “America a better place to live” and focused on government spending and debt were also targeted, according to drafts of a watchdog agency’s report, which is set to be released this week and was obtained by POLITICO.

As early as March 2010, the agency’s so-called determinations unit began targeting conservative groups. Lois Lerner, the IRS official in charge of nonprofits, told reporters Friday that the decision to include “tea party” and “patriot” as search terms was made by low-level field reporters in Cincinnati.

But a few months after the targeting program began, a Treasury Inspector General for Tax Administration report found that the “determinations unit management requested its specialists to be on the lookout for tea party applications.”

The inspector general found no evidence that then-IRS Commissioner Douglas Shulman knew of the targeting when he adamantly denied at a congressional hearing in March 2012 that the program existed.

The report does appear to contradict what Lerner told reporters on Friday about when she first discovered the targeting. On a conference call, Lerner implied that she first began inquiring with her staff during the run-up to the November presidential elections — when she read about conservative groups complaining that the agency was in some cases asking for donor or member lists.

But the TIGTA report said Lerner learned about the program at a June 29, 2011, briefing. Lerner raised concerns about the language used to flag groups for additional scrutiny during that meeting, the report said.

In January 2012, the criterion was changed to “political action-type organizations involved in limiting/expanding government, educating on the Constitution and Bill of Rights, social economic reform/movement.” This change was put in place because the field officers felt previous search terms were “too generic,” the report says.

In May 2012, the agency informed the groups that it would destroy “some of the inappropriately collected information.”

The issue has enraged congressional Republicans and has prompted House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) and House Ways and Means Chairman Dave Camp (R-Mich.) to promise hearings into the matter.